This is a rush transcript from "Hannity," February 23, 2010. This copy may not be in its final form and may be updated.
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UNIDENTIFIED FEMALE: I haven't got enough money to feed my family but I make too much to get food stamps. I don't even make $10 an hour.
REP. PAUL KANJORSKI, D-PENN.: Right.
UNIDENTIFIED FEMALE: Now if you take that money and sub-divide it between the taxpayers on this country we would stimulate the economy. You know why? Because we'd go off — pay off bills, pay off the excess, create jobs, and buy stuff that we need.
UNIDENTIFIED MALE: Caller?
UNIDENTIFIED FEMALE: That's how you stimulate the economy.
UNIDENTIFIED FEMALE: There's no way that you can look at this bill and not be motivated to write your congressman.
UNIDENTIFIED MALE: It really got me thinking. It really opened up my mind.
UNIDENTIFIED FEMALE: A lot is at stake for our generation. And now the burden is going to be on us.
KANJORSKI: We are having an electronic run on the banks. They decided to close the operation, close down the money accounts. If they had not done that their estimation was that by 2:00 that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States — would have collapsed the entire economy of the United States. And within 24 hours, the world economy would have collapsed. It would have been the end of our economic system and our political system, as we know it.
UNIDENTIFIED FEMALE: Crisis are going to come. My baby granddaughter is going to pay for it.
UNIDENTIFIED FEMALE: It was sobering reality.
UNIDENTIFIED MALE: It impacted me deeply.
UNIDENTIFIED MALE: If you're an American, if you care about this country, you need to see this film.
UNIDENTIFIED MALE: September 18, 2008. A lot of people call it the abyss. We were beyond the abyss. And you have to understand that in the history of the financial world we never had $786 billion be withdrawn from, quote, unquote, "safe money market accounts."
This was about the banks. This was about the withdrawal of maybe $2 trillion, and like the world's biggest margin call.
KANJORSKI: And that's why when they made the point we've got to act and do things quickly, we did.
UNIDENTIFIED MALE: It really gave me a sense of urgency that I didn't know was there until watching this film.
UNIDENTIFIED MALE: This is not just something that happened the last year. It's been in the making for 20, 30, or 40 years.
UNIDENTIFIED MALE: I've never seen a documentary like this. It's shocking, it's disturbing, it's frightening. But it's necessary. I think everyone needs to see this film.
UNIDENTIFIED MALE: We have borrowed about $55 trillion.
UNIDENTIFIED MALE: You know what $1 trillion is? $1 trillion is one of these turned on its side, piled dollar upon dollar, until you get to a pillar 67 miles high. That's $1 trillion.
UNIDENTIFIED MALE: As bizarre as Paulson was in a lot of ways, he got it. He got it immediately. And when he called these guys together and said, you know, boys, we got a problem.
KANJORSKI: You know we're not any geniuses in economics or finance, we're representatives of the people.
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HANNITY: And welcome to a "Hannity" special: "Generation Zero" now the new documentary part of which you just saw examines not only the current economic crisis that our nation is in but also how we got here.
Now the movie completely refutes the popular notion that massive deregulation caused the economic downturn and that, as liberals say, capitalism failed.
So what actually happened? Now this ground breaking film reveals a frightening alliance between the Democratic Party and big business. Now it also turns to history for answers. Finding many of them within the baby boomer generation.
Now for the entire hour we'll examine all of this. And we're now joined by the writer, director and producer of "Generation Zero," Steve Bannon, and the film's executive producer and the president of Citizens United Productions, Dave Bossie.
Guys, welcome here. So you showed us — you guys at Tea Party Convention. You showed it at CPAC. A massive hit. Did you expect this kind of reaction?
DAVID BOSSIE, "GENERATION ZERO" PRODUCER: I got to be honest, no. I'm really shocked and obviously very pleased.
STEPHEN BANNON, "GENERATION ZERO" DIRECTOR: Two different audiences, too. I think the Tea Party audience was slightly older. The CPAC audience very young. They hit them exactly the way we wanted it to. I think that's the first time they've kind of been seeing all these facts put together in an 80-minute, 90-minute presentation.
HANNITY: Let's go to one broad overview. We're going to be showing highlights of this film, you know, throughout this hour because this is really important. The myth is, is that capitalism failed. The myth is, is that the banks failed and the insurance companies failed. But there's something deeper to the story.
BOSSIE: Certainly. It's hubris and greed at the same time that it's the cultural and social break down from the '60s that is really taken that 30, 40 years that led up to September 18th crisis.
BANNON: On September 18th, at 2:00 in the afternoon the chairman of the Federal Reserve, the secretary of treasury went to the White House, then went up to Capitol Hill and told the leaders of our government that our economy was about to melt down, the world economy was about to melt down, and we would have complete social meltdown.
How did that happen? I mean how did something that our enemies — the Kremlin, the Nazis, the Japanese — could never do? We look at all the forces —
BOSSIE: We did it to ourselves.
BANNON: Did it to ourselves and all the forces that came together over 40 years.
HANNITY: Wasn't that always their goal? They're going to get America from within?
BOSSIE: That's right.
BANNON: That's exactly what happened.
HANNITY: See, I always make the case that especially — and we're going to get into some specificity detail here. But the idea that the government would tell — first of all, they designed the car companies in the country. The government would tell banks and financial institutions that they've got to make risky loans that they know people are never going to pay back.
BOSSIE: Sure. The greatest generation, the World War II generation — it would never dawn on them to take the type of risk that these people did. The people who were the '60s hippies. The people at Woodstock in the '60s who became the yuppies of the '80s really the barons of the 2000s and really are the leaders around the country that helped cause this. It really is a remarkable thing.
HANNITY: That leads us into our next clip. Why don't you describe for our audience what this is? For example, we've got — go ahead.
BANNON: The next clip is where we show the mothers that — the mothers of the 1950s. We show their lives. We show their lives in the Great Depression —
HANNITY: June Cleaver —
BANNON: June Cleaver, Donna Reed — we'll show what their formative experiences were, the Great Depression, World War II, where they had nothing in the Great Depression then in World War II, their husbands, their boyfriends, their uncles were in the slaughter pen of World War II.
And in the 1950s their objective was to have a nurturing environment so that that would never happen again to their children. And that's kind of where it starts.
HANNITY: All right. Let's roll the tape.
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JOHN J. XENAKIS, AUTHOR, "GENERATIONAL DYNAMICS: FORECASTING AMERICA'S DESTINY": People really misunderstand the 1950s. They think in terms of, like, June Cleaver and Donna Reed. As if everybody was discriminating against women, forcing them to stay at home. But that isn't it at all.
They grew up during the Great Depression. They were surrounded by death. They were surrounded by starvation. They were surrounded by bankruptcies. Homelessness. Just to survive they had to go to a soup kitchen.
These same young women, their brothers, their uncles, their fathers were tortured on the Death March, were slaughtered like fish in a barrel on the beaches of Normandy. They were tremendously traumatized by that.
And the main objective is that their kids would never have to go through anything like that again.
These are mothers who had suffered their whole lives. They consider a home with a white picket fence to be the dream of a lifetime. They lavished enormous amount of love on their kids. They gave them anything they wanted. Gave them all the attention they wanted. So these kids pretty much grew up getting their own way.
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HANNITY: I watch this and it reminded me of my parents. You know my father grew up really poor. It was a big deal. He signed up for World War II. Fought for four years in the Pacific. And it was a big deal for him to get a 50x100 lot, you know, a Cape Cod house, four kids. I had three older sisters and one bathroom. It's not good.
HANNITY: But this was the — were they too indulgent because of their experiences?
BOSSIE: I think that's right. Look, that's what we explained in this film. I think that we go through how that generation wanted to protect and really do the best that they possibly could for their kids because they didn't want them — they had seen what the Great Depression had been.
They had seen World War II and just the meat grinder that our boys signed up for. It went day after day. So I think that because of that cultural reality for them, and — that they felt that they wanted to protect them. And that's what they did.
BANNON: And as you see the arc of this story, this epic, you have to see where we came from. Where the boomer generation came from. Look at the — look at what we had. Look at what was bequeathed to us.
You know, a country at peace, a country with a large industrial base. A country with very sound finances. If you look at the start of the story from the 1950s, there's no generation that could have ever started with more that was given of them by a country.
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HANNITY (voice over): Straight ahead. A look at how and why the Democratic Party has aligned itself with big business. Plus how those who survived the Great Depression produced a generation of spoiled brats and how those brats helped bring about the collapse of the American financial system.
UNIDENTIFIED MALE: It was all about me. It was me. I'm the most important person in the universe and I'm going to satisfy my desires.
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HANNITY: And welcome back to a "Hannity" special. "Generation Zero." And tonight we are examining just how the financial crisis came about. Now the documentary "Generation Zero" asserts that the financial crisis was actually a culture crisis.
It suggests that by 2008 the ethos of personal responsibility had completely disappeared from American culture and that put the entire financial system at risk.
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UNIDENTIFIED MALE: You look at the graph of the Dow Jones Industrial Average. There's actually a sharp corner where the graph goes up. That was the beginning of the dotcom bubble. Why did that happen in 1995? Why did it happen in 1985? Why did it happen in 2005? Why did it happen at all?
UNIDENTIFIED MALE: The Depression-era generation was retiring. This is generation that understood the dangers of financial risk. They had grown up in the economic deprivation of the Great Depression.
The baby boomers that took over only knew the upside. They only knew about prosperity. So they took over Wall Street. They had ambition, they had the hunger for profit. And they also realized something else. They realized that up to this point the investment houses had been partnerships.
UNIDENTIFIED MALE: You know, all the banks that blew themselves up, they were all publicly traded as Bear Stearns, and Lehman Brothers, and Merrill Lynch, and Morgan Stanley and Goldman Sachs. They used to be partnerships and now they became publicly traded.
UNIDENTIFIED MALE: When you're a partner at a Wall Street firm, you were a partner. Now that meant joint and several liability. You have complete and total liability for anything that happens. If one of your partners really screws up badly and loses billions of dollars.
When you are sued, they go after the partner's assets and that includes not just their stocks and their bonds and their bank accounts, but their houses and their cars and their boats and their Rolexes. There is no shield.
UNIDENTIFIED MALE: Now let me tell you. You know other than, you know, telling your wife that, you know, you've had an affair, I can't think of a more uncomfortable situation than going to the partners and saying oh by the way boys, I lost you $50, $100 million, which each one of these guys are going to have to write a check out of the checking account.
No would you be out on your ass, you'd be out of business because you took a stupid, insane risk, and you did it with other people's money who were sitting around the desk.
UNIDENTIFIED MALE: The old guys in the basement with the green visors, looking at the numbers, making sure that hey, we're not going to take too much risk because I'm not going to lose my house. Everything was handled in a very fiscally prudent, very conservative basis.
That why when you look in the publicly traded companies there is no liability on the people who made the decision. So you could wipe out the company. You could send it to zero. But these guys who paid themselves tens of millions of dollars, their houses are safe, their boats are safe, their cars are safe. Their wealth is safe. It falls on the shareholders and the taxpayers.
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HANNITY: And back with me are the writer, director and producer of the film, Steve Bannon, and the film's executive producer and president of Citizens United Productions, David Bossie.
You know, I'm thinking of this as I'm watching this particular here. Small business goes belly-up, they go bankrupt and they usually lose a lot. And what you're saying here is that these Wall Street firms are protected. These big companies are protected. There's been a shift in the paradigm.
BOSSIE: Certainly. I think and one of the things Steve brought forward in this movie so well is just what we saw here. In the old way it was done, you had to have personal responsibility. But this new generation, it seemed like the concept of personal responsibility was left in the mud at Woodstock kind of what we say. That it really — they lost track of who they were and it was all about me, the me generation.
BANNON: The investment banks are incredibly important in the post-war era, as integral part of the building the United States to industrial power. Goldman Sachs, Morgan Stanley, First Boston — these were partnerships with men that have fought in the World War II and put their country first, and had tremendous fiduciary responsibility.
What you just described, Sean, is that we have — we have two systems in this country. We have socialism for the very poor. We have socialism for the wealthy. We have capitalism for the middle class.
HANNITY: It's an interesting way. I've never really thought of it that way.
BANNON: It essentially is. And the bailouts, all the financial bailouts, everything. The investment banking part of this meltdown is very important. That's what people really don't really understand. And it is a bail-out of the financial elites. And it's really socialism.
HANNITY: It's interesting you say this. Now — but it's interesting that the incestuous relationship which you go into in the film between the Democratic Party and big business, because the impression, I think, of a lot of people if you ask, no, that's the Republican Party, you know, big business, you know, they're in their pockets, et cetera.
BOSSIE: Well, yes, I think if you look, I think Peter (INAUDIBLE) who pointed that out so eloquently is that the Democratic Party has truly taken over that position of power on Wall Street.
BANNON: I don't want to get the Republican Party off the hook.
BANNON: It's really a party of incumbents. That political class is — their pay masters are the — is Wall Street. And by the way, 80 percent of those have come to the Democratic Party. So the Democratic Party has really shifted to what we call the party of Davos to represent big financial interests.
HANNITY: So can I put this way that basically these companies, they offer big donations to political candidates of both parties, oftentimes. And they get fringe benefits. And part of the fringe benefits is that things go bad, they get bailed out?
BOSSIE: It's truly the party of incumbents. That's what this is all about. They want to support — look, the corporations get hit up for donations from the politicians and the politicians come back and say what can we do for you?
HANNITY: So who's more corrupt? Is it the political system that is more corrupt? Because I believe capitalism works. Capitalism is the answer.
BOSSIE: It clearly —
HANNITY: They create the jobs.
BOSSIE: Capitol Hill is the problem, not Wall Street here.
BANNON: Well, I think it inextricably linked network between Capitol Hill and Wall Street. Let's take this for example. In the bailout, Sean, we've had $2 trillion of bailout to financial firms. The bonus pool in 2006 was about $70 billion for Wall Street firms on transacts that all went belly-up and had to be bailed out in 2008.
In 2009, the bonus pool is about $70 billion. You've had the American taxpayer, the average middle class American, paying taxes to bail out these big firms and there's been no change of behavior. No change in structure. No change in regulations.
HANNITY: Why should they? Because they got the government there to help them. And there's no incentive, right? We're in the free market. There would be incentives.
We're going to take a break.
BANNON: Crony capitalism.
HANNITY: Coming up, does our trade deficit matter? Now "Generation Zero" says it is putting us at risk. So what is the solution and how do we stop outsourcing our wealth?
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UNIDENTIFIED MALE: Trade is critical to the mess that we are in. From after the Civil War to the 1960s America was the world's foundry. We won World War II and World I essentially by out-producing the Germans and the Japanese.
Over the last 30 or 40 years we've essentially de-industrialized Americans through a series of trade agreements.
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HANNITY: And tonight we are talking about the new documentary, "Generation Zero." Now the film suggests that our trade deficit played a large role in bringing about the financial crisis and that if we don't fix that we are in for a very rough ride.
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LOU DOBBS, TALK RADIO HOST: We've lost 6.5 million jobs since December — December of 2007 in the onset of the recession.
UNIDENTIFIED MALE: In the past, we would lose some jobs during recessions, we'd get some of them back during boons. We've never had the kind of deindustrialization we've had over the last 10 years in American history. And that's simply been because your political needs are looking out for bankers, the Hollywood producers and the high-tech community.
DOBBS: Where is the concern about the more than 30 million Americans who lost their jobs or who cannot find full-time jobs to work?
UNIDENTIFIED MALE: Americans consume about 5 percent more than they produce. Essentially by importing and borrowing from the rest of the world. It's why we have the big credit bubble.
We now owe foreigners to pay for those goods about $7 trillion. At its low point, the stock market was only worth about $8 trillion or $9 trillion.
DOBBS: The people who have traditionally represented the American workers are congressmen, are senators — well, they are more interested in representing vested interest, Wall Street, the U.S. Chamber of Commerce, the business roundtable.
More than $3 billion a year being spent on lobbying, 435 congressmen, 100 senators and one president.
UNIDENTIFIED MALE: Unless we make things in America we'll import more than we export to an enormous degree, have to borrow from the rest of the world and eventually go bankrupt.
Over and over again we have signed bad deals. First with Japan. And now with China. Where they export so much more to us than they import.
If China maintains an undervalued currency to keep its products artificially cheap in the United States from 2004 to 2008 the trade deficit averaged over $700 billion a year. We now owe the rest of the world $7 trillion. That's an enormous debt.
The next time around, we'll owe foreigners enough money that they could simply buy up all the stock of all the publicly traded companies in America. They could buy-out America.
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HANNITY: And we're back with the producers of the film, Dave Bossie and Steve Bannon.
You know, is it basically you're saying in this film, our government is bought and paid for that the regulations we see coming out are directly corresponding to the amount of money that people are giving to these candidates? Is that what it is?
BANNON: Absolutely. And I think that's why you've got this Tea Party Movement. I think the Tea Party Movement that the American working man knows that we live under the consent of the governed. I think the governed are telling you we do no have their consent.
HANNITY: Are you —
BANNON: I think they're fed up with it.
HANNITY: Do you support tree trade? Do you support protectionism?
BOSSIE: I'm a tree trader.
BANNON: Free trade, but it's much more complicated than that. This is, by far, I think the hardest thing we're going to have to deal with. When we talk about the deficit and debt or anything like that, we have de-industrialized this country. And the question is, have we been free traders? Have we been gained by (INAUDIBLE) policies?
It shouldn't be lost in us that the economies that are on fire in the world — China, India, Brazil and East Asia — all of our jobs have been shipped over there.
HANNITY: All right. So here's the deal. If America puts any protectionist policies in place — first of all, the Chinese already are using the fact that they own all our debt, or a good percentage of our debt as a weapon against us.
BOSSIE: That's a leverage —
BANNON: That is why people are shocked when they see this film. If you take the event horizon down the road, debt is the jam that every day we're getting in deeper and deeper.
HANNITY: The most frightening, one of the most frightening things that I saw recently was when I saw that the Chinese military went out there and said wait a minute, we're going to stop buying American debt. We're going to dump their bonds.
BOSSIE: If they don't —
HANNITY: Because we're supporting Taiwan.
BOSSIE: That's right. As a foreign policy mechanism to force us into taking a different position, they literally could — could start the run on our economy.
HANNITY: All right. But I want to go back to this issue. I'll use the car company as an example. It breaks my heart that people that I know, good people, you want to talk about an industrial area where we ought to be thriving. We created this. We owned this. It was ours.
HANNITY: But here comes the government. And they regulate safety and they regulate emissions and they regulate gas mileage. And they regulate, regulate, regulate.
BANNON: Convergence of big labor, big government and big capital —
HANNITY: Who's designing the course? Washington or Detroit?
BANNON: This is by far the hardest part of this equation. This is why the stimulus bill hasn't worked. One of the reasons is that, there's not an industrial jobs base out there that you can have working men and women can actually have a job that can support a family.
BOSSIE: That's right. There's only so many ditches you can dig, roads you can build, bridges you can build. I mean there's a lot of them that need work. But we need an industrial base.
We used to — as you said, we used to build the automobiles and we used to have the factories and the plants that used to provide for the world. And now we have totally placed that overseas.
HANNITY: You know I know a guy that runs a coal company in Virginia. I don't know if he wants me to mention his name, but he wrote me a note the other day. And he's dealing with the regulatory side of the government all the time.
I mean he's a job creator. He's an energy producer. And meanwhile, his capacity to do his business, expand his business, compete on the open market, is — he's describing a nearly impossible situation for America to compete.
So is government hostile to capitalism? Is government now hostile to that imbalance that you're talking about?
BANNON: I think that the industrial base — look, the things that thrive, Silicon Valley, Hollywood and the financial services, are politically well connected. They give huge campaign contributions and they have air cover by government.
The people that have —
BOSSIE: And politically correct, too.
BANNON: Politically correct. The people that have not done that have suffered and that's the industrial base. And we are not going to get ourselves out of here on a service-based economy.
I think people who think that have not thought it through. You need a manufacturing base that can support the working men and women of this country.
BOSSIE: Now if we do not get back to that very core we're going to be in for a long, long road here and there's nothing — no upside to it in the near future.
HANNITY: Coming up, how our massive deficits are setting us up for a catastrophe and how future generations will pay.
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UNIDENTIFIED MALE: And this idea that we're going to borrow $9 trillion and run deficits of $1 trillion for the next eight to nine, 10 years is slowly, slowly, being punctured, those ideas.
Well, fast forward, my friends. When we add another $9 trillion under the $12 trillion we've already borrowed, we're going to have revolution.
HANNITY: Welcome back to our "Hannity" special, "Generation Zero."
Now, we've watched the Obama administration increase the national debt by an unprecedented amount. Now, they say they're doing this to get us out of the last financial crisis. But in doing so, could they be bringing about the next big one?
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DOBBS: We have, as it stands right now, a $12 trillion national debt. Over seven trillion in external debt or trade debt. Almost $2 trillion federal budget deficit.
UNIDENTIFIED MALE: In 2009, the federal government is borrowing over $1.8 trillion. That comes to more than $150 billion a month. Next year it will be $1.4 trillion. And we're going to continue borrowing over $100 billion a month, over a trillion dollars a year.
STEPHEN MOORE, ECONOMIST, THE WALL STREET JOURNAL: It doesn't take a Ph.D. in economics to think that you can run $1 trillion, $2 trillion, $5 trillion, $10 trillion of debt.
DOBBS: These numbers are simply incomprehensible, they're so large.
UNIDENTIFIED MALE: The fiscal crunch can be dated fairly precisely. It's the year 2011. That is the year the first Baby Boomer turns 65 and qualifies for Medicare benefits.
UNIDENTIFIED MALE: The iceberg under the surface. I'm talking about the liabilities in the form of promises that we have made to people, particularly younger people today, that we will be able to pay them their Social Security, their pensions and their health care, for the rest of their lives, strongly subsidized by government, when we haven't the slightest ability to sustain and underwrite that funding without massive borrowing, borrowing far beyond borders of magnitude beyond what we can afford.
UNIDENTIFIED MALE: It means we would need to have somewhere in a bank $100 trillion right this minute earning interest. Now, the problem with that is, the total national wealth of the United States, of the money that every single American has saved, added up, the value of every corporation, the value of every security, every stock, every bond. If you add all of that together it only comes to just over $50 trillion.
So we have problems. Twice the wealth of the entire United States to the elderly, that will have to be paid one way or another.
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HANNITY: All right. We continue now with Dave Bossie and Steve Bannon.
Nothing gets me angrier than this: robbing the piggy banks of our children and our grandchildren. This — this — how long can we sustain $1.56 trillion in debt a year?
BOSSIE: Sean, you and I both remember back in the '80s — everybody does — we used to say the debt that we're creating is going to — is going to be foisted on our grandchildren and our great-grandchildren. The debt today is now on us. It is not going away; it's getting bigger. A hundred billion dollars a month is insustainable — unsustainable.
BANNON: Here's the problem. If you look at, you know, this massive off-balance-sheet liability we have with Social Security, Medicaid and Medicare, $100 trillion, that's not even the worst entitlement program.
What we have today, the worst entitlement program is a political class that think they have a credit card that just continue to run up these deficits. And it's federal spending. It's the size of the deficit and the size of the debt.
BOSSIE: And that's what Barack Obama has done, I think, is really become the poster child for the debt. And that's what he's done, in my opinion, to energize the Tea Party movement and the conservative movement within this country. And why there's tremendous candidates, why there's a Christie, why there's a Scott Brown, why there's these folks around the country getting elected that normally wouldn't.
HANNITY: See, I agree. And the people that I talked to in the Tea Party movement and the people that I've met and the people that write me, and the people that call my radio program, one thing: they're concerned that this is going to be the first time ever in the history of this country that we hand off the country to them in worse shape than we received it. And this is — and people find that unconscionable.
BOSSIE: It really is. And that's what we — that's one of the things that, you know, that this film, I think, does so beautifully is really crystallize that, that we the living, there's this bridge between the — the folks who have gone before us, the dead, and the unborn.
And it's a bridge we have always — the generations are always supposed to give this country, because we are the greatest nation.
BANNON: You know, it's funny, the Tea Party, because they're mocked as being — as being stupid, they really get it. And what they get is...
HANNITY: Anybody that's not a liberal, by the liberal establishment.
BANNON: Right, right, right. You know what they get? This is a real crisis for our country.
HANNITY: They get it.
BANNON: Not a manufactured crisis like global warming or the health care crisis. This is a — this is an existential crisis.
HANNITY: You know, for all the anger. And I had anger and frustration with Republicans, you know, because their spending was getting out of control, too. They were using money to keep their power.
HANNITY: As bad as they were, nobody would have anticipated that in one year, Barack Obama would nearly quadruple the deficit spending and then raise it even more in a second year. With trillion-dollar deficits as far as the eye can see.
BOSSIE: And quadruple the money supply. I mean, this is — this is a big problem. Look, this is a Republican and Democrat problem. The Republicans under George Bush spent out of control, and it's one of the reasons they got kicked out of power.
HANNITY: Four hundred billion to $1.43 trillion in one year.
BOSSIE: The Republican Congress was spending, spending, spending and it was horrible. And we became what we fought against in 1994, what we said we would do and fix. And we made a principled decision. And Newt Gingrich for four years balanced the budget, if people remembered, '95 to '99.
BANNON: Sean, the other thing is the scale of this and how quickly it's moving. The deficient inPresident Obama's 2010 budget, the deficit is the size of federal spending under George Bush in 2001, about $1.8 trillion. I mean, the scale of this is just getting out of control. And even liberal economists are now starting to get concerned.
HANNITY: Look at what's happened in Greece. Look at what's happening in some of these European countries.
BOSSIE: They're the canary in the mine shaft.
HANNITY: Yes, they really are, warning about what's about to happen.
Coming up, a look at this generation's forgotten man. Who government policy is really punishing and how they will be harmed. And guess what? It's not the folks making over $250,000.
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UNIDENTIFIED FEMALE: The forgotten man today is our children and grandchildren. Because we're taking their money, and we're leaving them with the debt. The grandparents are robbing the grandchildren. We're loading the debt on their shoulders and telling ourselves a little bedtime story that it will be all OK.
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HANNITY: Tonight we are taking a look at roots of the financial crisis through the documentary film "Generation Zero." Now, the film points the finger at the country's political leaders, but it also is sending a stern message to each and every American. Let's take a look.
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UNIDENTIFIED MALE: It means, if we are going to embrace the path of free enterprise that has made this country great, we're going to have to do some hard things and make some hard decisions. We're going to have to tell some people no. They're not going to get bailouts.
NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: You either have the courage to make the hard decisions now or you're forced later on to live with the hard consequences. It's part of what we call maturity, being an adult, having real judgment.
DOBBS: There is a lack of quality in our leadership, in every aspect, in every role, in every part of our public life. But the real crisis in leadership begins in the homes and the households of this country.
Until the American people understand that they have to take responsibility for their own lives, that we can no longer depend on the elites for their efforts of their energy being dedicated to our interests, we're going to continue with one of the most threatening crises in our country's history.
UNIDENTIFIED MALE: The problem that we face is one of national character right now. We have traditionally thought of the American way of life as one in which we enjoy a huge amount of thriving and prosperity, but furthermore, we engage in a system of free enterprise and prosperity and opportunity that we pass onto our children that means that they're going to have at least as much opportunity as we ever had.
What we're doing right now in response to this crisis is completely contrary to that. Our political class is telling us that what we need to do to save ourselves is to mortgage the future of our country and the future of our children. That's a change in our national character and a change in our national culture. That's a very, very extreme thing to do.
UNIDENTIFIED FEMALE: The forgotten man in the 1930s was the little guy who didn't happen to be in the program from the government, the small business who didn't happen to fall into one of the favored groups of the New Deal. The little business struggling and waiting for government experiment and the recession to end.
The forgotten man today is our children and grandchildren, because we're taking their money, and we're leaving them with the debt.
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HANNITY: And we continue now with Dave Bossie and Steve Bannon.
I kind of like what everybody on this said here. If you go to Arthur Brooks and he goes on about free enterprise, et cetera, et cetera, we're going to have to make hard decisions and tell people no, you're not getting any more of our money, pretty simple.
BOSSIE: If you can't afford the house, don't buy it. You have to be told no at some point. If you don't have a credit rating that can buy the car, you don't buy the car.
It's not — it's not nice. It's not politically correct. It doesn't feel good, but it's the right thing to do.
HANNITY: You know, it's funny. When I grew up, I didn't grow up — when I started my adult life, I had to drop out of college three times. I couldn't afford to pay for it. I was doing construction, painting houses, laying tile and doing everything I could do to get my next batch of money. I drove $200 and $300 cars. I painted my landlord's apartment.
Whatever happened to that attitude? I never — I never expected the rich to give me money. I expected to go out and earn money.
BANNON: Right. It was a different time and a different era. And I think that the politicians have just promised so much to people. And I think one of the problems we have here, and what Arthur Brooks gets to, is that all the easy choices are in back of us. All the simple solutions are years and years ago, Sean.
All we have in front of us today, if you — if you play this thing out — is hard choices. But even worse, they're all going to be unpopular. And that's what I think the Tea Party is saying. It's not — they're not looking for a man on the white horse to come in.
HANNITY: Now, this is interesting, though, because George Bush made some tough decisions. Everybody supported him. And then over time, the demonization begins. So when it comes time to cut Medicare, when it comes time to deal with Social Security, when it comes time to deal with these budget deficits and you're going to see some cuts, is the country going to accept that? We're at a crossroads, right?
BANNON: We're at a crossroads, and I think that's what we're going to see. I think the Tea Party movement is showing you that, and I think over the next couple of years we're going to see it.
HANNITY: Will they sustain it? I'm not talking about the Tea Party movement. Will the country sustain it?
BOSSIE: I don't though we'll have a choice. I think people are going to have — look, this is tough medicine. This is tough medicine we're going to have.
HANNITY: Nobody wants that.
BOSSIE: Nobody — nobody ever wants that but that's how we got to this problem, was the — this irresponsible behavior by the politicians and by Wall Street.
HANNITY: But this is what — this is the whole point, to just sort of tie this all together, because you're dealing with, all right, a different mentality of my parents and my grandparents, which had nothing.
BOSSIE: They had the responsibility. They knew if they couldn't — they didn't earn the money they couldn't go out and buy the car, the house.
HANNITY: So where did we go wrong? Where did we get to this point where, whether you can afford a house or not, the government's going to give you a loan.
BANNON: Narcissism. I think that's the narcissism that came from the culture revolution of the '60s. What we had is started to have this narcissistic behavior, where the self became everything. And once you become self-centered, it all becomes the me generation.
HANNITY: There's a political component to this. There are people that have always wanted and have always advanced the idea of socialism in America. To each according to his need, if you want to use the Marx line, from each according to their ability. Right?
BANNON: Well, our worst form, even capitalism, where you keep getting bailed out. You get a form of capitalism where — where the wealthy keep the up side, he elites keep the upside and the American taxpayer pays. We nationalize the risk and we privatize the profits.
That's — that's why you have such anger from the working man in this country, because it's not fair. Remember, our currency is not backed up by any — by gold, by silver.
HANNITY: You want it backed up by gold?
BANNON: No, no, no, no, but it's backed up by trust. And what we're seeing now, I think for the first time in American history, is really — is really the American people are starting to lose faith and confidence in their government.
HANNITY: Two things have come up recently. America's AAA bond rating, there's talk, is in danger. Tim Geithner actually suggested that it be open to the idea that America, the dollar will not be the world standard.
BOSSIE: Look, those — that's inconceivable to me. And we — this is an — this is an exceptional nation. We have some problems. We have — we have some tough medicine ahead of us. But we're going to get ahead of it. We're going to get back on track.
I have great faith in this country. I have great faith in our people, in the working men and women of this country.
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HANNITY (voice over): Coming up, America's most difficult decisions may not be behind her.
GINGRICH: Revolutionary War period up through creating our Constitution, the Civil War period and the Great Depression and World War II. In those three periods of choosing, people had to decide what kind of country we were going to be, where we were going to go as a nation.
I think we are entering a similar period. The choices over the next few years are among the most profound we will have seen in all of American history.
HANNITY: Now, this nation has survived many trials, from the great wars of the last century to September 11, but the documentary "Generation Zero" suggests that some of our most daunting challenges may lie ahead. Take a look.
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DOBBS: We, in my generation, bear an absolute responsibility for squandering that wealth and for what we have done to future generations.
My generation owes it to the moment in history in which we live and to those succeeding generations to try to right what we have absolutely failed in over the course of the past 40 years. It's a great burden.
Unfortunately, we're not the ones who will carry that burden. But future generations of Americans certainly will.
UNIDENTIFIED MALE: Thomas Payne back in the American Revolution said, "These are the times that try men's souls." And certainly, Abraham Lincoln and FDR during the Civil War and the Great Depression, they had similar expressions about how we need to soldier on. We needed to continue to do the right thing. We needed to reach down within ourselves for resourcefulness, for fortitude. And these are times that will be remembered by future generations.
GINGRICH: No one should underestimate where we are today. We're either going to be a secular, socialist European-style, government- dominated country with slow economic growth and dramatically more power in our politicians, or we're going to fundamentally shift to basic American values: the work ethic, entrepreneurship, decentralization, local government, volunteerism, all the things that have, for 400 years, made us so dramatically different from Europe and so much more productive than anybody else on the planet.
UNIDENTIFIED MALE: It becomes a time of testing, of adversity. And it becomes a time, too, when the best qualities of every generation comes to the surface and becomes very important in steering history in a good direction.
UNIDENTIFIED MALE: Each season has a vital function. America, usually during forth turnings they solve huge problems. But more importantly, forth turnings are necessary for the evolution of civilization. There has to be a period when we get rid of what's old. Particularly what's old institutionally. We make the ground fresh again for the young.
UNIDENTIFIED MALE: The question of what that new order will be, is up to us and to the younger generations, and it always will be.
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HANNITY: And we are back now with the producers of that film, Dave Bossie and Steve Bannon.
This is our last block. We were just talking in the break about what it would really take to get America's fiscal house in order. It will take some dramatic changes. It would take a change in attitude, change in the culture. You think it can happen?
BOSSIE: It has to happen. For us to continue as this great nation, it has to happen. I believe it will happen.
It takes politicians with courage. It takes politicians with conviction. I believe that there are men and women out there that can do it. Barack Obama is simply trying to be all things to all people. And I think he's trying to spend and inflate his way out of this problem. And it's going to be — end in disaster.
HANNITY: I was right about Obama from the beginning: rigid ideologue, no sense of — a sense of tone deafness I've never seen in any politician. But the same question to you: will the American people accept that the gravy train is over? And will the politicians have the political courage to say, "Sorry, no more"?
BANNON: Sean, it's time to find out. I mean, I think that's one of the great things about the Tea Party movement. If you think back...
HANNITY: You're a real Tea Party supporter.
BANNON: I am.
HANNITY: I am too, by the way. They inspire me.
BANNON: You know why? It's the voice of the working man and woman in this country.
HANNITY: I agree.
BANNON: It's the decent people who fight our wars who run our civic organizations, who are the backbone of this country. It's the people that have very kind of 1950s values of what they — roll up their sleeves, and they're decent folks.
HANNITY: Not looking for hand-outs. They're just looking for the — leave me alone.
BANNON: The exact opposite. The exact opposite.
BOSSIE: They want to be heard. They want to say their piece, and they want to be heard and respected.
BANNON: Look how they're being vilified right now. Look back at the Vietnam War the way President Nixon was vilified. Look at how Ronald Reagan was vilified in his — the first part of his administration. Look how George Bush was vilified and demonized.
I think we're going to go through a period where it's going to be — because there are no easy decisions. There's no popular decisions. And the American people — and that's why the Tea Party movement, I think, is so powerful. It's going to have to have the back of a new — a new generation of political leaders, and hopefully some of those come from Baby Boomers.
HANNITY: But I don't — I watched Gingrich up close during the revolution. His Contract with America and the demonization of the day-to-day. I watched very closely.
I think the best thing George W. Bush did was kept this country safe, and he never wavered — wavered on the idea that we've got to be on the offense, which we weren't in the lead-up in the 1990s. I don't know. These problems seem worse to me.
BOSSIE: First of all, Barack Obama has taken us back to Bill Clinton-era policies on the...
HANNITY: No, he's taken us back to Carter on steroids.
BOSSIE: That's — that's frightening. But look, we can build, even though we have a calamity here and we have a problem here, you know, we have built on the ashes before: after the Great Depression, after World War II. We can do it again. This country can do it. We are the greatest country in the world, and we can do it.
BANNON: But we do have a timeframe. We can't continue to put — I think the day of reckoning is coming, because I think so much of our own debt is now owned by — by China and the Gulf Emirates and Russia, that the day — the day of accounting is coming.
And the further we go down this road without making these fundamental changes, the smaller the playing field, the fewer our options. We've always had a country that they had a lot of different alternatives, a lot of options. You will start to see that narrow down. So that's why, I think, the next few years are critically important.
HANNITY: I think it's got to start with — there's two models. The Contract worked. Reagan worked. Reagan inspired people. He changed the worm. Economically, he made the world a safer place. Those would be my two models.
BOSSIE: First of all, this film is a wake-up call. I think it will inspire people if they watch it. Ronald Reagan was my inspiration.
HANNITY: Mine, too.
BOSSIE: And that's what we tried to do here.
HANNITY: All right, guys. Great film. I really enjoyed it and really appreciated it. And thanks for being with us.
And that is all the time we have left this evening. Now, for more information on the film or to purchase a DVD, just go to GenerationZeroMovie.com. As always, thank you for being with us for this special edition of "Hannity", "Generation Zero." Have a great night.
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